Pareto Securities’

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1 Pareto Securities’ 23 rd Annual Oil & Offshore Conference 14-15 September 2016 Chow Yew Yuen CEO Keppel Offshore & Marine

Transcript of Pareto Securities’

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Pareto Securities’

23rd Annual Oil & Offshore Conference14-15 September 2016

Chow Yew Yuen

CEO Keppel Offshore & Marine

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Disclaimer

This release may contain forward-looking statements which are subject to risks and uncertainties that could cause actual results to differ materially from such statements. Such risks and uncertainties include industry and economic conditions, competition, and legal, governmental and regulatory changes. The forward-looking statements reflect the current views of Management on future trends and developments.

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• Offshore rig design, construction, repairand upgrading

• Ship conversionand repair

• Specialisedshipbuilding

Offshore & Marine

• Property development

Property

• Energy & related infrastructure

• Logistics & data centres

Infrastructure

• Asset management

•Property & infrastructure trusts

•Private funds

• Investments

Investments

Keppel Corporation

Meeting the needs of sustainable urbanisation.

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Leading designer, builder and repairer of high-performance mobile offshore drilling rigs

Offshore

Trusted industry name for repair, conversion and upgrade for a diverse range of ships

Ship Repair & Conversion

Designer and builder of a wide spectrum of highly specialised ships for global customers

SpecialisedShipbuilding

Design and engineer market-relevant and commercially viable solutions for all frontiers

Technology

Keppel Offshore & Marine

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Industry Headwinds

Oil and gas prices remain low

Significant reduction in global E&P spending

Overhang of uncontracted newbuilds for rigs

Oversupply of offshore supply vessels

Offshore production projects pushed to the right

Rig delivery deferments and cancellations

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Order backlog as of end-Aug 2016

includes:

22 newbuild rigs

16 FPSO/FLNG/FSU projects

One pipelay vessel

One ice-class multi-purpose

vessel

One subsea construction

vessel

Three dredgers

Contract wins year-to-date include

four FPSO projects, a pipelay

vessel upgrade and three dredgers.

Keppel’s Order Backlog

Newbuild semis

7%

FPSOs/FLNGs63%

Specialised vessels

2%

Others4%

Newbuild jackups

26%

Net orderbook*

S$4.3b

*As of end-Jun 2016, excludes contracts for six semis with Sete Brasil.

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Responding with Agility

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Lowered workforce by about

28% from early 2015.

Reduced overheads by about

20% yoy in 1H 2016.

Restructuring yards with low work

volumes.

Streamlining operations using

data analysis.

Rightsizing to Optimise Operations

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Improving Efficiency & Productivity

Automated panel line

Asian Hercules IIICAN-DO barge

Robotic fit-up & welding machine

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Retaining & Strengthening Capabilities

Improved construction methodologies.

Integrating resources across our

global operations.

Enhancing processes and engineering

capabilities.

Investing prudently in R&D.

Developing and redeploying talent.

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Broadening Product & Service Offerings

Acquisition of LETOURNEAU™ business increased Keppel’s rig designs to

more than 26 and added to its aftersales business.

Added designs and construction capabilities for Production units

Solutions for gas value chain

Variety of specialised vessels

Non oil and gas solutions

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Aftersales, Aftermarket & Lifecycle Services

Aftersales, aftermarket and lifecycle

maintenance services for:

Jackups/semis/drillships

Specialised vessels

FPSOs/FLNGs/FSRUs

Scope of services:

Sale of spare parts

Engineering services

Repair

Field service

Inspection

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Execution Excellence

Delivered four KFELS B Class jackups, a harsh environment land rig,

a semi upgrade, a liftboat, a derrick lay vessel, an anchor handling tug,

and an FPSO project.

Cidade de Caraguatatuba MV27 Derrick lay vessel, DLV 2000KFELS B Class jackups,

CANTARELL I & II

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Singapore: Keppel FELS

Global leader in offshore rig design, construction and repair.

113 jackups and 39 semisubmersibles delivered and on order since 2000

by Keppel O&M.

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Singapore: Keppel FELS

Order backlog of 21 newbuilds, with deliveries into 2020.

Completed eight repair/upgrading projects year-to-date, with another 12 on order.

SSAUTM 5000NG unit, Floatel Triumph Refurbishment of semi, Ocean Apex

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Singapore: Keppel Shipyard

Converted/repaired 40% of FPSO/FSO/FSRU vessels worldwide.

Average of 400 vessel conversion/repair/modification/upgrade jobs per year.

Fabricated 30% of turrets for FPSO vessels worldwide.

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Singapore: Keppel Shipyard

Order backlog of 13 FPSO/FLNG/FSU jobs.

Golar’s LNG carrier, the HILLI

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Singapore: Keppel Shipyard

On track to deliver four FPSO jobs in 2016.

Harsh-environment FPSO, Armada Kraken

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Singapore: Keppel Singmarine

Constructed over 400 specialised vessels for global clientele.

Delivered six pipelay vessels, the highest number by a single builder.

Constructed 11 ice-class vessels, the largest builder in the region.

Derrick lay vessal, DLV 2000

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Singapore: Keppel Singmarine

Recent key deliveries include three ice-class vessels, a derrick lay vessel

and an anchor handling tug.

On track to complete an ice-class multi-purpose vessel in mid-2017.

Ice-class vessels, Bumi Uray, Bumi Pokachi and Bumi Naryan-Mar

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China: Keppel Nantong

Offers effective production support to the Singapore yards.

To support Keppel Singmarine in building three Trailing Suction Hopper

dredgers for Jan De Nul*.

* Construction of the third dredger will start upon receiving notice from Jan De Nul.

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US Gulf of Mexico: Keppel AmFELS

Established a strong track record in the construction, refurbishment,

conversion, life extension and repair of a variety of drilling rigs.

Delivered a land rig and a KFELS B Class jackup in 2016.

Harsh environment enhanced mobility land rig

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Brazil: BrasFELS

Over 16 years of experience providing solutions for offshore rigs, FPSOs,

specialised vessels and repair and upgrading projects.

Completed six FPSO projects since 2010.

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Brazil: BrasFELS

Presently engaged for three FPSO projects, including module fabrication

and integration for MODEC’s FPSO, MV29, and Petrobras’ FPSOs,

P-66 and P-69.

Delivered FPSO, Cidade de Caraguatatuba MV27 in early 2016.

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Azerbaijan: Caspian Shipyard & Baku Shipyard

Synergies of our yards in the design and construction of rigs/vessels.

Subsea construction vessel,

KhankendiDSSTM 38M semi

Modules transported 13,000 km

from Singapore to Azerbaijan

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Delivered a major upgrade of the semi, Istiglal, as well as a jacket

transportation and launch barge year-to-date.

Purpose-built jacket transportation and launch barge, STB-1Upgrade of semi drilling rig, Istiglal

Azerbaijan: Caspian Shipyard

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Opportunities - Production Solutions

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Floating Production Market

FPSOs remain the preferred floating production solution. 45% of FPSs on

order are FPSOs, constituting 60% of the global FPS capex.

Niche demand for tension leg platform and semi floating production units.

* Source: Energy Maritime Associates

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Production Solutions Suite of deepwater floating production

solutions.

FPSO conversions, tension leg

platforms and semi floating production

units.

Leveraging engineering, procurement,

construction and installation capability

to build superstructures.

Proven FloaTEC designs for extended

tension leg platforms:

Kizomba A

Kizomba B

Magnolia

P61 Papa Terra

Big Foot

ETLP-3 design

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Opportunities - LNG

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LNG Market

¹ Source: Douglas-Westwood.

² Source: DNV-GL. The numbers exclude LNG carriers and inland waterway

vessels and are as of 23 Oct 2015.

Global LNG expenditure is expected to total US$284b in 2017-2021,

a 50% growth from the preceding five-year period¹.

0

50

100

150

200

2010 2011 2012 2013 2014 2015 2016 2017 2018

No

. o

f S

hip

s

Development of LNG-fuelled fleet²

Ships in operation Ships on order

LNG demand is driven by:

COP21

Gas-fired power plants

Harbour use

FSRU for municipalities

LNG-fueled ships

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Solutions for Gas Value Chain

Gas to LNGOffshore liquefaction

Gas to LNGOnshore liquefaction

LNG as FuelEngine conversion

LNG to GasRe-gasification and storage

LNG to UsersTransportation and bunkering

LNG to PowerBringing power to users

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FLNG Solutions

The global FLNG market is

expected to draw US$65b of

investments in 2014-2020*.

35 years of experience and

expertise in conversion and

modularization.

Economical, safe and quick to

market midstream solutions for

small and mid-scale LNG projects.

Awarded three FLNG vessel

conversion jobs from Golar LNG.

Keppel’s FLNG + FSU deployment concepts provide cost

effective solutions for gas export terminals.

*Source: Douglas-Westwood.

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PreNEx Liquefaction Technology

Keppel’s proprietary PreNEx (Pre-cooled

Nitrogen Expansion) offers simple, safe and

reliable alternative to other LNG processes.

The land-based PreNEx LNG plant for PT NAT Gas has a

liquefaction capacity of 50 tons/day.

PreNEx can be used for

offshore and onshore

applications.

Collaborating with PT

NAT Gas in developing

PreNEx LNG plant in

Batam, Indonesia.

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LNG Bunkering & Distribution

The Keppel-Shell joint venture, FueLNG,

secured the license to supply LNG

bunker in Singapore.

Developing Singapore into a key

LNG bunkering hub in Asia.

Meeting the needs for sustainable

shipping with our growing LNG

solution.

Potential pull-through for LNG-fuelled

newbuilds, repairs and conversions.

Expertise in LNG vessel servicing.

Award winning dual-fuel ASD tug

design.

65T LNG-fueled ASD tug

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LNG Transportation & Logistics Solutions

LNG carriers for shallow waters

3,000mᶟ capacity,

non-propelled

8,000mᶟ/10,000mᶟ capacity,

non-propelled

12,000mᶟ capacity,

self-propelled or non-propelled

Storage capacity up to 50,000mᶟ

FSRU barge

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Opportunities - Specialised Vessels

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Specialised Vessels

Ice-class vessel

Liftboats

Decommissioning/plug & abandonment vessels

Pipelay vessels

Subsea construction vessels

Cable laying vessels

Ice-breakers/Ice-class vessels

Dredgers Liftboat

Artist impression of Trailing Suction Hopper dredgers

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Opportunities - Non O&G Solutions

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Offshore Wind Support

Offshore wind market continues to grow.

Seven projects in Europe has drawn

€14b investment in 1H 2016.

Keppel offers a full suite of offshore wind

support solutions, including:

Liftboat/self-installing platforms

Offshore substations

Jacket foundations

Floating cranes

Offshore support barges

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Single/Dual Fuel Floating Power Barge

Increasing demand for offshore power

in developing countries.

Minimal land usage

Cheaper fuel

High mobility

Quick implementation

Customised business model related

to Power Purchase Agreement

opportunities.

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Offshore Desalination

Freshwater shortage driven by

climate change and population

growth.

Global floating desalination market

expected to generate at least

US$1.5-4b every year until 2025*.

Advantages of offshore desalination:

Minimal ecological footprint

Minimal land usage

Quick implementation

High mobility

* Source: Deloitte.

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We aim to anchor our position as the

trusted and preferred solutions partner

in the offshore & marine industry by

seizing opportunities to build and grow

our businesses.

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Thank you

Q&As